Line 6[1]: it’s official and the federal government has to admit it. The individual mandate is a tax. That means that changing it even by a penny is – no fooling, seriously, this is not something that you can just executive-order away – only possible via an Act of Congress. This will not happen (Obamacare was designed to keep Republicans out of the loop for as long as possible) which means that the current very low penalties for noncompliance are never going to get any higher.

Shoot, at the rate things are going paying the fine and getting insurance on your own will be a pretty good deal. Assuming, of course, that the Supreme Court doesn’t make the whole thing moot by declaring that the individual mandate is invalid in federal exchange states*.

Moe Lane

*Yup, Halbig. If the government can’t provide subsidies to a state that doesn’t have an exchange, effectively the mandate goes away for that state. Dang but the Democrats are bad at writing legislation, huh?

Despite his administration’s quiet move overnight to ease the individual mandate for some Americans, President Obama said today the requirement will “absolutely” be enforced starting April 1, 2014, when everyone must have health insurance or pay a fine.

Speaking at an end-of-year news conference, the president insisted that there will be no delay of the mandate as some Republicans have repeatedly called for.

…it’s not clear that the IRS will deploy much in the way of resources to aggressively search for individuals who don’t get coverage this first year. Enforcement of the individual mandate likely will be a huge challenge for the agency, both because of the difficulties in figuring out who doesn’t have insurance and the political problems it would pose for the Obama administration.

“I’d be very surprised if there’s much in the way of enforcement. It just doesn’t seem plausible,” said Federal Policy Group Managing Director Ken Kies, a former top congressional aide. “The IRS is in a tough spot. They don’t have the resources to do this. This is a whole different responsibility for them they never had before.”

[The Obamacare tax] tax will generally be far lower than ObamaCare premiums. That’s the clear conclusion of a new study by the 2017 Project, which compares premiums in the ObamaCare exchanges in the 50 most populous US counties to the tax that households could pay instead.

This year, that tax equals the greater of two numbers: 1) $95 per adult in a household, plus half of that amount for each child, up to $285 for an entire household, or 2) 1 percent of household income in excess of the tax-filing threshold ($10,150 for singles, and $20,300 for married couples).

So, for instance, a 31-year-old single man making $30,000 in Columbus, Ohio faces a tax of $198.50, more than $2,000 less than the cheapest option in Ohio’s ObamaCare exchange, even including his taxpayer-funded subsidy. For a 36-year-old San Diego woman making $40,000, the tax is $298.50, or nearly $2,400 less than the cheapest policy on the California exchange. She’s not eligible for a subsidy.

In California, for the Silver plans offered by Anthem Blue Cross and Kaiser Permanente, the monthly premium for a family of four is nearly $1,000. As one potential online enrollee tweeted, “It didn’t even show me Gold (plan). Probably figure I’d have a heart attack right there.” It did show the bronze plan, at a cost of about $750 per month — along with a whopping $5,000 deductible and out-of-pocket expenses of 40 percent.

It’s much the same in Nevada, with bronze plans ranging from $582 to $745 monthly, and deductibles as high as $6,300 with 40 percent out-of-pocket expenses. And regardless of whether you need an individual plan or a family plan, even with a subsidy, you are looking at a huge increase in premiums and out-of-pocket expenses, with stringent limits on care. Beyond the technical glitches, these plans don’t make financial sense for many individuals and families. It will make far more financial sense to buy a non-Obamacare compliant plan and pay the penalty tax. People will figure that out soon enough — and they won’t be happy about it.

(Bolding mine) In 2014, the Obamacare tax penalty will be 1% of taxable income above $10K. Assuming a median household income of $50K, that means that if the price differential between an Obamacare-qualifying plan and an existing/potential non-Obamacare is more than $400/year, it makes sense to eat the tax (and vote Republican in November). And apparently the government didn’t really take into consideration the possibility that rates were going to skyrocket enough in their Potemkin Village of a marketplace.

Right now the White House is in carrot mode, trying to sell “young invincibles” on the glories of health insurance. But the carrot doesn’t work on everyone: According to Gallup, more than 30 percent of the uninsured were unaware this past week until they were polled that they’re now required by law to buy insurance. As we get closer to December and the need grows more urgent for a big pool of new revenue to cover those with preexisting conditions, the White House is bound to shift from carrot to stick. I’m curious to see how they play that. They’ll hammer the fact that it’s ILLEGAL not to have insurance if you can afford it and that the TAXMAN will make you pay a FINE if you don’t, but they might not emphasize too much that the fine (for this year at least) is the higher of just 95 bucks or one percent of your income. If a thousand Obama speeches on how awesome ObamaCare is can’t create a groundswell of enrollment, maybe strategically vague warnings implying that the IRS might kick down the door will do it.

Here is a handy chart for individuals looking to calculate their Obamacare tax. I’m putting it up because there’s a bit of confusion out there over how much people can expect to be taxed. For example: the $95 or 1% rule is on taxable income, not total income. This means that you have to subtract $10K currently to determine how much the government will tax you for not having health care, which of course removes $100 from your final yearly tax obligation. For some strange reason the administration isn’t too keen in letting people know just how small the tax is going to be for young, unmarried workers.

Crazy, huh?

Anyway, below is the chart, based on the data found here. Remember, the final tax will be the higher of the flat rate, and a percentage of adjusted taxable income; everybody’s getting hit with this. (more…)

Postulated: If you wish to see more of something, you subsidize it; if you wish to see less of something, you tax it. I assume that we are all on board with this, yes? – After all, this has been a major point used to justify sin taxes for, well, my entire life. In other words… “tax it out of existence” is a sentiment that is not exactly unique to this post.

Which leads to this observation from Andy Puzder, head of the company that operates Hardees and Carl’s, Jr:

About 40% of [CKE Restaurants CEO Andy] Puzder’s employees are part-time and therefore exempt from ObamaCare’s coverage mandates. “That percentage of employees will probably go up. Everybody is hiring more part-time employees,” he says, though he is quick to add that “we’re not firing anyone to hire” part-time workers. “Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours.”

Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. “You’re going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don’t have to pay benefits for any of those things.”

I recognize that this news from the National Review is a bit of a disaster for political scientists:

As the din of America’s falling headfirst over the fiscal cliff reverberates across the nation, the Obama administration is quietly killing a key economic metric that tells how, and how many, people are voting with their feet. Since 1991 the Internal Revenue Service has been compiling statistics on filers’ addresses, which the agency’s Statistics of Income division uses to show who is moving into and out of every county and state in the nation. As you’d expect, the IRS also knows the aggregate income levels of those who move. So the movements of the most fundamental productive components of the economy — taxpayers — can be analyzed by journalists and economists, or could until now.

The IRS and the U.S. Census Bureau (which provides technical support in reporting tax migration data) have not made an official announcement as to why the program is being discontinued.

I was on a conference call today with Governor Bobby Jindal and former Governor Tim Pawlenty; they are both currently on a bus tour of Pennsylvania and Ohio for the benefit of the Romney campaign. We had an opportunity to ask questions; and, seeing as these two states are both Republican-controlled (due at least in part to the 2010 backlash against Obamacare), I asked Governor Jindal about whether he had some advice to the state governments about signing up for the proposed expansion of Medicaid, now that it would be voluntary on the states’ part.

To summarize the Governor’s response – and with the caveat that Jindal doesn’t actually want to tell other states what to do – Louisiana will not signing on to the Medicaid expansion, for three reasons:

It will add a 3.7 billion expense over first ten years for Louisiana taxpayers alone.

It will remove 100, 000 people from private insurance and putting them into Medicaid.

It will not in fact even create jobs; it will just create a new entitlement program.

It has it all: the truth of the basic situation (Obamacare is a TAX), the willingness of Barack Obama to admit it (he is NOT), and the way that this entire situation is leaving the taste of ash in the mouths of more perceptive liberals everywhere (they REALLY didn’t want to get limits on the Commerce Clause*). Pretty good cartoon.

Moe Lane

*To reference AoSHQ: I understand a certain skepticism towards Congress is warranted at all times; but, really, there was a reason why the administration avoided admitting that it was a tax in the first place.

And that affects profoundly the question of how to get rid of it. Mickey Kaus is correct, and Ryan Lizza & David Frum are wrong on this: the only reason that Obamacare was not cast down was because the US Supreme Court decided 5-4 that the so-called ‘individual mandate’ was constitutional if it was considered to be a tax. The US Supreme Court also decided, 5-4, that the so-called ‘individual mandate’ was not Constitutional if done under the Commerce Clause. So anyone who wants to argue that the Obamacare health tax is not actually a tax must also admit that Obamacare is unconstitutional. Supporters of Obamacare do not get to have it both ways. The Supreme Court has ruled that Obamacare’s centerpiece is a half trillion dollar tax hike on the middle class. This is a thing that has happened. And it means, among other things, that the Democrats’ threat of a filibuster is an empty one when it comes to repealing it next January. We have a Senate majority, we can remove the health tax. Simple as that.

DO NOT LET THE OTHER SIDE GET AWAY WITH PRETENDING OTHERWISE. I understand fully why the Democrats don’t want to campaign on the position that their ‘signature’ accomplishment is a horrific, promise-breaking middle class tax hike; it’s only slightly better than campaigning on a promise to give kittens leprosy. But that’s the Democrats’ problem, not ours. All we have to do is figure out new ways to keep the gloating albatross around their collective neck until the election. And one way to do that is to never, ever, ever let any apologist for the Democrats and/or Barack Obama get away with pretending that Obamacare [can be constitutional without being] a tax. If they get upset about that… good. That means that what you’re doing is working.